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Theresa May delays Hinkley nuclear decision amid concerns over Chinese involvement

July 29, 2016

By Paul Homewood 

 

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http://www.telegraph.co.uk/business/2016/07/23/russia-china-and-south-korea-should-be-invited-to-build-uk-nucle/

 

A few further thoughts to add to the Hinkley saga.

Last Sunday, the Telegraph interviewed Tim Yeo, (yes, him), who has now set himself up as a lobbyist for nuclear power. He suggests we should be looking at cheaper options with already proven technology (while still going ahead with Hinkley).

One wonders why he was not recommending these alternatives, when he was still on the Select Committee. (But as has been pointed out, he was not being paid to then!):

 

 

Russian, Chinese and South Korean nuclear companies should be offered subsidy contracts to build reactors in the UK if they are cheaper than other projects already under development, a prominent nuclear lobbyist has said.

Tim Yeo, the former chairman of the House of Commons energy select committee, said EDF’s proposed £18bn plant at Hinkley Point, which is expected to get the go-ahead this week, should be allowed to proceed, but he urged the Government to rethink its approach to future projects.

 

Tim Yeo in his Westminster office Tim Yeo in his Westminster office Credit: Geoff Pugh

 

The Japanese-owned Horizon and Franco-Japanese NuGen consortia are both developing plans for reactors at sites in the UK and hope to secure approval for their technologies and subsidy deals from the Government.

Mr Yeo, the MP for South Suffolk for 32 years until the 2015 general election, now chairs New Nuclear Watch Europe, a lobby group whose members include the Korean nuclear firm Kepco. He urged the Government to “urgently examine which nuclear vendors can deliver the cheapest electricity, maximise the number of UK supply chain jobs and minimise the risk of construction delays”.

Mr Yeo highlighted the “progress being made towards much cheaper nuclear generated electricity by China, Russia and Korea”, adding: “The Government should compare what all these companies, together with Horizon and NuGen, can offer.” If other offerings were significantly better, their technologies should be fast-tracked through the regulatory approval process and sites allocated to them, he said.

http://www.telegraph.co.uk/business/2016/07/23/russia-china-and-south-korea-should-be-invited-to-build-uk-nucle/

 

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Meanwhile, today the Telegraph report that the reason the govt is delaying its decision is because of concerns about Chinese involvement:

Theresa May has put off a decision about Britain’s first new nuclear power station in a generation amid concerns about China’s involvement.

Nick Timothy, Mrs May’s joint chief of staff, has previously heavily criticised George Osborne’s attempts to secure Chinese “gold”, which he said was buying British silence on human rights abuses.

He suggested that the expected involvement of Chinese state nuclear companies in the deal could enable China to “shut down Britain’s energy production at will”.

http://www.telegraph.co.uk/business/2016/07/29/theresa-may-delays-hinkley-nuclear-decision-amid-concerns-over-c/

 

I doubt whether the Chinese will be too pleased. As the Telegraph goes on to comment:

The Telegraph understands that the chairman of CGN [the Chinese nuclear firm], He Yu, had flown to Britain this week in order to sign the deals in Somerset. A "VIP" event to celebrate the deal had been planned for Friday, with a marquee erected at the site ready to host dignitaries.

Like EDF, Mr He and a delegation of Chinese officials were taken completely by surprise at the last-minute change of plan, which only emerged in the course of Thursday.

 

 

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More news also on the resignation of Gerard Magnin, EDF board member:

A board member of EDF has quit ahead of its meeting to approve the Hinkley Point nuclear plant, calling the project "very risky" and suggesting it could drag the French utility giant into an "abyss".

In a resignation letter seen by Reuters, Magnin said he had expected EDF’s strategy to move towards renewables but instead it was pursuing more nuclear power.

"As a board member proposed by the government shareholder, I no longer want to support a strategy that I do not agree with," Mr Magnin wrote.

He said the Hinkley Point project was "very risky". Areva, the company that is due to be make the reactors for Hinkley, had to be bailed out by the French state earlier this year, with EDF taking on the reactor-making division.

"Let’s hope that Hinkley Point will not drag EDF into the same abyss as Areva," Mr Magnin said.

http://www.telegraph.co.uk/business/2016/07/28/edf-board-member-resigns-attacking-hinkley-point-nuclear-project/

 

Talking of finances, one issue that nobody seems to have mentioned yet is the fall in the value of sterling post Brexit. This will mean that EDF will be paid much less in Euros, once electricity is being produced, which admittedly is a long way away, if ever. While much of the cost of construction will be paid for in sterling, there will be an element of Euro transactions, such as the reactors.

Recent devaluation is therefore one more risk to the profitability of Hinkley.

 

 

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And finally. The Telegraph provide a helpful timeline of events, reminding us that, back in 2008, EDF was telling investors that Hinkley Point would be producing electricity at a cost of £45/MWh, rather than the current price of £92.50.

Which hardly inspires confidence!

 

 

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21 Comments leave one →
  1. tom0mason permalink
    July 29, 2016 1:59 pm

    Cost effective and a proven design, now why would the UK want that?
    http://www.world-nuclear.org/information-library/country-profiles/countries-o-s/south-korea.aspx

  2. A C Osborn permalink
    July 29, 2016 2:04 pm

    Hinckley Point C – Vampire Nuclear, the blood sucking investment that won’t die.
    Drive a stake through it’s heart and build something sensible that genertes at sensible prices.
    To do so drive a stake through the heart of all SUBSIDIES the biggest vampire of all.
    While they are in place we will never get a decent deal as nobody can afford to build generation and supply electricity unless they also have them.

  3. A C Osborn permalink
    July 29, 2016 2:21 pm

    Paul, I still think that the people in Government are dumb enough & profligate enough with public cash that they will still go ahead and sign this up.

  4. July 29, 2016 2:35 pm

    “Architects’ concepts” of the finished Hinckley remind me of something else large and white.

    • A C Osborn permalink
      July 29, 2016 2:40 pm

      An Elephant perchance?

  5. rwoollaston permalink
    July 29, 2016 2:47 pm

    Dear …………….,

    I am very pleased to see the Government is reviewing this project. Although I am a supporter of nuclear, the way this project is financed (build today, let our children pay) is unethical as well as the project itself being very expensive and very high risk. There are cheaper alternatives (including smaller scale modular nuclear generation already developed and supplied by Rolls Royce for nuclear powered vessels).

    The developments of the last 24 hours have highlighted to many people something they may not already have known – namely the level and cost of subsidies needed to support power from Hinkley Point. Several people I have spoken to have finally realised that an index linked doubling of electricity prices when/if Hinkley Point starts production will be paid for by them or their children either in significantly higher bills or through significantly higher taxation. The sums involved (for Hinkley Point and other similar projects) will dwarf the subsidies already paid to support wind and solar generation, and to generators to keep plant on standby.

    People may be able to accept this if the rest of the world is tackling carbon intensive methods of power generation., hence are in the same boat as us. However the Paris agreement specifically provides that the most carbon intensive power generators (the developing countries including China and India) need only reduce the carbon intensity of newly constructed facilities compared to today’s levels – by an unspecified amount. Given the growth rates of these economies (largely due to the outsourcing of industrial production from developed countries), global carbon emissions are going to rise spectacularly over the period of the agreement.

    So we are beggaring ourselves in the name of an objective that cannot be achieved.

    I hope the Government looks closely at this situation in order that the interests of our country can be protected.

    Yours sincerely

    ….Every letter helps!

  6. rwoollaston permalink
    July 29, 2016 2:48 pm

    Sorry – I omitted to say that I sent the letter to my MP.!

  7. AlecM permalink
    July 29, 2016 3:06 pm

    What you all have too remember is that Davey agreed to the massive power price, index linked, so that wind energy would always be cheaper.

    • July 29, 2016 3:41 pm

      I think anti-nuclear potato Ed agreed to the huge price because he knew it would kill off all future nuclear projects which would want the same price.

      • July 29, 2016 4:11 pm

        Spot on !
        #1 TMay maybe putting pressure to play for better terms.
        #2 TMay’s gov may believe that French don’t work in August ..so might as well use the time to check the contract properly.

      • AlecM permalink
        July 29, 2016 4:22 pm

        Then he has a higher IQ than I suspected.

      • July 30, 2016 11:26 am

        @Alec M – Ed Davey maybe was hiding his devious cunning behind a facade of incompetence ..it’s a common trick.

    • AlecM permalink
      July 30, 2016 6:18 pm

      I agree Stew: been doing it myself for many decades….:o)

  8. RogerJC permalink
    July 29, 2016 6:09 pm

    If we want to consider South Korea we could have a nuclear power station with a big British input. Doosan Power Systems, based in Crawley, are a subsidiary of Doosan Heavy Engineering of South Korea, an EPC, who have built many of the Korean Nuclear Power Stations

    . Doosan Power trace their roots back to Babcock and Wilcox and were involved in many of the nuclear reactors and steam generators built in the UK and for many years were involved with Rolls Royce and Associates who built nuclear submarine propulsion systems. They have heavy manufacturing in Glasgow and current experience maintaining many of the UKs nuclear power plants.

    • Billy Liar permalink
      July 29, 2016 11:36 pm

      That’s way too sensible – never happen.

  9. July 30, 2016 9:08 am

    Some commentators claim the UK gov. expected EDF to pull out and were forced into the sudden ‘review’ when they didn’t. As they can’t blame France, the only other easy option is to blame China – otherwise they would have to admit their own bad decisions.

    • AlecM permalink
      July 30, 2016 9:31 am

      Good call, but there is I believe a back up plan in place which will create employment and export opportunities absent for the Hinkley nukes.

      This will become apparent in the next few weeks. It is based on analysis which started over 6 years ago. Unfortunately Cameron with his ‘eco-fascist’ wife decided to go all out for windmills with the Lib Dems, who actually fronted the carbon traders (Huhne) and EdF (Davey via his brother, also previously Brown and his brother, Miliband and his wife) despite being told that they could never work in our grid.

      Thus it has taken until now, power cuts being imminent (because of major plant maintenance cycles) for Government to come to heel. After all, no Tory Government can afford to enter the 2020 election having had major power outages in the previous winter with 100s of 1000s of deaths as we will by then have entered the new Little Ice Age cold winters.

  10. johnmarshall permalink
    July 30, 2016 9:53 am

    Nothing wrong with gas powered generation. £18Bn would build you 18 of those. Forget that CO2 it does not affect climate.

    • July 30, 2016 11:30 am

      plus the cost of the fuel over lifetime ..which is almost free overall, if it is UK fracked gas.

  11. July 30, 2016 11:36 am

    it’s EDF that really changed the date not TMay
    ‘ ..cos they’ve always been indicating they would decide in September then suddenly they advanced the decision.
    T May is just sticking to the older schedule.’ is a point that I heard on the radio.

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